FocusAsian naphtha prices to edge up on closed arbitrage window

24 March 2011 07:44[Source: ICIS news]

By Felicia Loo

SINGAPORE (ICIS)--Asia naphtha prices are expected to edge higher in the coming weeks, mainly driven by prices of global crude futures, increased gasoline blending requirements and the closure of the Europe to Asia arbitrage window, traders said on Thursday.

But several factors are expected to put a lid on price gains, including the shutdowns of some naphtha crackers in Japan following the 11 March earthquake and seasonal peak cracker turnarounds in the region, they added.

India’s Reliance Industries sold by tender 75,000 tonnes of naphtha for loading from Sikka on 9-15 April at a higher premium of $25-27/tonne to Middle East quotes FOB. It was up from a premium of $22/tonne fetched in a previous tender for a late March-loading stem.

Elsewhere, South Korea’s Honam Petrochemical has bought by tender 50,000 tonnes of naphtha for delivery into Daesan in the second half of April at a premium of $9.00-9.50/tonne to Japan quotes CFR. Prices slid from its previous tender, for which Honam paid $11.50/tonne to Japan quotes CFR for 50,000 tonnes heading into Yeosu and Daesan.

“The picture is not clear,” said one trader.

Meanwhile, Japan’s Cosmo Oil has bought 53,000 kilolitres, or 334,000 barrels of gasoline, and 80,000 kilolitres, or 503,000 barrels of jet-kerosene for delivery into Sakai in Osaka, between end-March and early April.

Japan’s JX Nippon Oil & Energy has bought 40,000 kilolitres, or 251,600 bbl, of 10 parts per million (ppm) gasoline from South Korea for delivery in April.

PetroChina is to supply 170,000 tonnes of gasoline, diesel and fuel oil from its joint-venture (JV) refinery with JX Nippon in Osaka to help ease the energy shortage.

JX Nippon is also on track to restart its 460,000 tonne/year naphtha cracker in Kawasaki as expected on 27 March after it was taken off line following the 11 March earthquake, a company official said this week.